Payroll
/
Saudi Arabia
Global coverage
Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
SAR ر.س (Saudi Riyal)
Employer contributions
12% employer GOSI (9% pension + 2% annuities + 1% occupational hazard for Saudis); 2% for expats
Minimum wage
No statutory minimum for expats; SAR 4,000 for Saudi nationals (Vision 2030 reference)
Payment frequency
Monthly
Hijri/Gregorian fiscal year (varies by entity)
Capital
Riyadh
Timezone
AST (GMT+3)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~SAR 13,440 total
/month
For a gross salary of
SAR 12,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
12% employer GOSI (9% pension + 2% annuities + 1% occupational hazard for Saudis); 2% for expats
Mandatory extras
Annual Performance Bonus
Monthly admin
Monthly payroll - GOSI by 15th - Nitaqat Saudization tracking - labor card renewals
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~SAR 13,440 total
Example gross salary
SAR 12,000 gross/month
~SAR 12,000 net (expat)
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~SAR 1,440 GOSI (Saudi employee)
Employer contributions on that salary
Employer contributions
12% employer GOSI (9% pension + 2% annuities + 1% occupational hazard for Saudis); 2% for expats
Employee contributions
10% employee GOSI (Saudis only)
Total cost above gross
~12% above gross (GOSI)
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~SAR 8,000
Per month
Riyadh
SAR 10,000 - 25,000
~30%
Jeddah
SAR 9,000 - 20,000
~20%
Monthly gross. National average salary per year:
~SAR 96,000
Minimum wage
No statutory minimum for expats; SAR 4,000 for Saudi nationals (Vision 2030 reference)
Paid:
Monthly
Extra pay
Annual Performance Bonus
Discretionary, common in oil and finance
End of year
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
No personal income tax for individuals
Tax year:
Hijri/Gregorian fiscal year (varies by entity)
Filing calendar
Monthly by 15th of following month
Social security payments
Not applicable
Income tax
Not applicable
Employee tax certificate
Not applicable
Not applicable
Annual return
Not required (no income tax)
Late payment penalties
Late GOSI: 1% monthly surcharge; Nitaqat violations: work permit ban
Who collects what
ZATCA
Zakat and corporate tax
GOSI
Social insurance for Saudis and expats
Ministry of Human Resources and Social Development (MHRSD)
Nitaqat Saudization and labor law
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Annual Leave
21 days (under 5 yrs) / 30 days (over 5 yrs)
Public holidays
~14 public holidays (Hijri calendar, dates vary)
Sick leave
Sick Leave
Full pay first 30 days; 3/4 pay next 60 days; unpaid thereafter
Maternity leave
10 weeks (70 days) maternity
Full pay from employer
The contracts you can use, and what ending an employment relationship costs.
Permanent
Indefinite Employment Contract
Fixed term
Fixed-Term Contract
Independent contractor
Freelance / Independent Consultant
Collective agreements
No general CBA
Ending employment
End-of-Service Award
How it is calculated
Half month per year (first 5 yrs) + 1 month per year (after 5 yrs)
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
Nitaqat Saudization Non-Compliance
Risk Level: HIGH
Saudi Arabia's Nitaqat system requires private sector companies to maintain a minimum percentage of Saudi national employees (varies by sector and company size, typically 20-35%). Falling below the required Saudization quota triggers a Platinum/Green/Yellow/Red color rating that restricts work permit issuance and visa renewals. MHRSD audits are automated via Qiwa platform.
End-of-Service Miscalculation
Risk Level: HIGH
Saudi end-of-service award must be calculated on last basic salary only, not total compensation. Employers who calculate on gross salary (including housing and transport allowances) overpay, while those who deduct penalties or loans from the gratuity violate Article 85 of the Labor Law.
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FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.